The second set of proposed regulations implementing this year's new campaign finance reform law will focus on "electioneering communications," also known as sham issue ads. At its August 1 meeting, the Federal Election Commission (FEC) released draft rules, which will be published in the Federal Register on August 7. Final regulations are scheduled to be ready by late September, and will become effective the day after this fall's elections. (The "electioneering communications" rules will not apply to the 2002 elections.) The FEC is required to complete all rulemaking proceedings before the end of the year. The public comment period is extremely short, allowing nonprofits and other affected parties to comment by August 29, unless they wish to testify at the public hearing. In that case comments and the request to testify must be submitted by August 21. The hearing will beheld August 28-29 at the FEC offices in Washington. The Bipartisan Campaign Reform Act of 2002 (BCRA) prohibits corporations, including nonprofits, and labor unions from broadcasting messages that identify candidates for federal office within 60 days of a general or special election and 30 days of a primary or nominating convention or caucus. (Print, telephone and Internet communications are not covered.) There are several exceptions to this ban, including news broadcasts, announcements of candidate debates and forums and expenditures by groups that qualify as "independent" under current FEC rules. BCRA also authorizes the FEC to create additional exemptions for broadcasts that refer to federal candidates without opposing or supporting their election. The proposed rules use this authority to address grassroots lobbying, and references to bills or laws that are identified by a candidate's name (i.e. McCain-Feingold). The FEC asks for comments on whether the regulations should only apply to paid advertisements, so that public service announcements or free cable TV time would not be restricted. Four alternatives for grassroots lobbying exemptions are presented, and comments are sought on which, if any, are most consistent with the new law. The alternatives include:

1. calls to action on pending legislation asking that a specific Member of Congress be contacted, without indicating the Member’s position on the bill or supporting or opposing the candidate’s re-election
2. brief suggestions that the candidate be contacted and urged to take a position on a legislative or executive matter, without reference to the candidate’s record, fitness for office, etc.
3. a reference to specific legislation or a public policy issue that can be addressed through legislation, and including contact information, or
4. calls to action urging contact with incumbent legislators to urge support or opposition to legislation, institutional action or policy proposals.

The electioneering communications ban does not apply to unincorporated entities, including 501(c)(3) organizations, or 501(c)(4) organizations that only use contributions from individuals to pay for the broadcasts, PACs and individuals. However, they cannot broadcast to a "targeted" area, which is defined as an audience of 50,000 or more in the district if a candidate for the House is mentioned, or the state of a candidate for the Senate. Expenditures of $10,000 or more must be disclosed, and the proposed regulations address practical aspects of implementation, such as how the 50,000-member audience threshold will be determined. The FEC is encouraging commenters to submit by email by addressing their comments to Mai T. Dinh, Acting Assistant General Counsel, at Electioneering@fec.gov. Written comments can be sent to Ms. Dinh at the FEC, 999 E Street NW, Washington, DC, 20463. Faxes to 202/219-3923 should be followed by sending a printed copy. For background information on BCRA and issue advocacy see our webpage on Money in Politics. Also see the FEC Press Release. To view the full draft of the regulations as an Adobe Acrobat file, click here. For more background on the campaign finance reform law, see the Campaign Finance Institute's interactive guide to the law.